Assume That a Simple Random Sample Has Been Selected from a Normally

question 22

Essay

Assume that a simple random sample has been selected from a normally distributed population and test the given claim. Use either the traditional method or P-value method as indicated.
Identify the null and alternative hypotheses, test statistic, critical value(s)or P-value (or range
of P-values)as appropriate, and state the final conclusion that addresses the original claim. A
public bus company official claims that the mean waiting time for bus number 14 during peak
hours is less than 10 minutes. Karen took bus number 14 during peak hours on 18 different
occasions. Her mean waiting time was 7.6 minutes with a standard deviation of 2.3 minutes.
At the 0.01 significance level, test the claim that the mean waiting time is less than 10
minutes. Use the P-value method of testing hypotheses.

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Definitions:

Par-value

The par value of a bond, share of stock, or coupon as declared by the issuer.

Yield To Maturity

The total return anticipated on a bond if held until it matures, including all interest payments and the repayment of principal.

Zero-coupon Bonds

Bonds that do not offer interest payments but are sold at a deep discount to their face value, maturing at par.

Conversion Premium

The additional cost above the market value of the underlying asset that an investor pays to own a convertible security, such as convertible bonds.